Pre non-farm nervousness haunts Asia

Stocks mostly end in red amid an overall lull in asset markets



Asian markets mostly ended in red in listless sort of trading with a cautious mood in the whole asset markets keeping the activity tight. The recent economic data releases from the US have been mostly bleak and traders are eagerly waiting for the non-farm data to shed some light on the current status of the fragile recovery. The yesterday's US economic data was quite poor and the Asian markets were seen facing selling pressure right from the start. The US Labor Department reported yesterday that first-time claims for unemployment insurance increased to a three-month high of 479,000 in the week ended July 31.US retailers also reported poor sales figures for July, keeping the outlook for consumer spending sluggish.

The Japanese market closed in red as the blue chips were hurt on the possibilities of a much-protracted economic activity in the US. The markets were also hurt on the persistent strengthening of the yen against the dollar. The benchmark Nikkei 225 Index shed 11.80 points, or 0.1%, to 9642. The index had opened sharply lower but then edged up on the slight weakening of dollar and a modest up tick in the DOW futures. However, the index continued to face resistance around the yesterday's closing levels and failed to hold onto the upturn that pulled the index in gain for a brief by the mid session moves. The broader Topix index of all First Section issues rose though, adding 4.08 points, or 0.5%, to 861.

On the economic front, a preliminary report released by the Cabinet Office in Japan stated that the leading index rose more than expected in June, following declines in the previous two months. As per the report, the leading index climbed to 98.9 in June from 98.6 in May.

The Australian stocks the trading session ended on a very flat note though the markets rallied from its intraday after the country's central bank kept its benchmark interest rates unchanged. Releasing its quarterly Monetary Policy Statement, the Reserve Bank of Australia said that its current interest rate structure is appropriate. The bank stated that the Australian economy continued to expand at a solid pace over the first half of 2010. The economy is benefiting from elevated commodity prices and high levels of public investment. Employment growth has been strong and confidence remains generally positive. Over the period ahead, some rebalancing of growth is expected, with public investment likely to decline as stimulus projects are completed, while private demand is expected to strengthen. The latest available GDP data show that real GDP increased by 0.5 per cent in the March quarter, to be 2.7 per cent higher over the year

The benchmark S&P/ASX200 Index slipped 0.40 points, or 0.01%, and closed at 4566 points, while the All-Ordinaries Index ended at 4,586, representing a slight gain of 1.40 points, or 0.03%. However, both the indices staged an impressive recovery from the day's lows.

While the rest of the markets witnessed a lull, Chinese stocks rebounded, extending gains for the benchmark index to a third week, as concerns about banks' stress tests eased and agriculture companies advanced after the worst floods in a decade boosted food prices. The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 37.64, or 1.4 percent, to 2,658.39 rebounding from the early losses. It seems that 2600 points levels are indeed acting as a very good support.

In Mumbai, the key benchmark indices reversed initial gains, hitting fresh intraday lows in late trade on profit taking ahead of the weekend. Index heavyweight Reliance Industries (RIL) edged lower. But, media and consumer durables stocks rose. Realty stocks reversed initial gains. Bank stocks fell on profit taking after a sustained rise over the past days. The BSE 30-share Sensex was provisionally down 30.77 points or 0.17%.

In other markets, the Hang Seng index in Hong Kong added 0.59% and the TSEC index in Taiwan rose 0.33%. The Straits Times index in Singapore shed 0.39%.

Dollar lost early but then reserved the losses after hitting 1.3200 levels against the Euro. Crude oil came off highs above $82 per barrel as traders eye the non-farm payrolls and the commodity witnessed some continued profit selling after the recent flurry of gains. DOW futures are very flat in the screen trades, quoting down 4 points when last seen.